One of the scams that was common at that workplace was actually buying out the car at the end of the lease (say for $15,000) and then selling it on the private market for $20,000.  The lease company sold you the vehicle for whatever the list-price was given the age and kilometres but (as Calgully said) often your second-hand car was  worth more than that so as a private individual you had a chance to make money tax-free and off the books; you also get another brand-new car straight away as part of your package.  Either way the whole thing is geared towards consumption and rewarding over-use.

The tax advantages of leasing your car for work really makes you look like a total fool if you opt to take public transport.

Yep.  I've seen that occur all the time.  For many years it was Aussie made vehicles that were leased via this scheme, but not so much now that "Aussie made" is no longer a pre-requisite.  One funny aspect is that many leases mandate a minimum mileage otherwise penalties would apply.  I knew a few people that took a quick drive up to Ayers Rock or Queensland and back to get the miles up before the lease ran out!

BTW, the director of the NGO I work for didn't want a lease car and uses public transport daily (and even between capital cities!) to set an example .  She ain't no fool.

On tollways and other and other user-pays road infrastructure (eg Sydney Harbour Bridge, Sydney Harbour Tunnel, Cross City Tunnel etc): although it seems at first like a rude impost by the operator (be it Garv Mint, private enterprise, whoever), I've always been in favour of using the tolled infrastructure, partly to get the benefit thereof, but also with the theory that someday the expense will have been met by the tolls and that piece of infrastructure will be toll free.

Granted in some cases this will never happen (Sydney Harbour Bridge for example), but it has happened elsewhere, notable examples being the F6 (Waterfall to Bulli Tops) and the F3 (Berowra to Calga).

Twaddle. Bad drivers are the problem, and they'll exist no matter how many people you put in the car. Additionally, what about people who cannot carpool? I regularly drive solo from the eastern suburbs of Melbourne through to Geelong or Seymour - are you suggesting I should be removed from the toll roads, which I'm paying to use?

Michael, I was referring to single-occupant vehicles being part of the problem of congestion, not the cause of the unfortunate truck accident.  Sorry if I didn't make that clear.

To add further to your point, Michael, I don't believe that car-pooling is any kind of solution at all - neither does the State Government as evidenced by their recent budget decision to axe funding to car-pooling schemes.  I'm not suggesting that you shouldn't be allowed to drive your car whenever or wherever you like but I do question whether or not it should always be completely free of charge particularly where everyone else wants to do the same thing at the same time (eg the Monash and Eastern inbound at 8am on a weekday).

The fundamental problem is that we are stuck in a loop whereby the only solution to traffic congestion is to build more roads.  The state seems incapable of any other response and in the meantime public transport becomes less attractive because of chronic under-investment.  I'd be interested to know if anyone out there has some good ideas about how to fix this situation ?  The only solution I can think of myself is congestion charging.

What is your point? You seem to be saying that car drivers should stay off freeways or tollways.

And you seem to be unable to comprehend my point.

Most car drivers will choose a freeway by default, even if the adjacent arterial road provides a better run.

Novated Leases are a rort to increase car sales and petrol usage.

In essence, they allow high paid employees to use pre-tax income to get a car at very favourable prices.

And its worse than that because the way these schemes are structured they actually encourage you to travel further than you might want to by having stepped tax discount rates based on distance travelled in an FBT year.  So if you've travelled 14000 or 24000km in the 11 months to March each year - it's in your interest to go out and drive up your km to get past the hurdle - the last 2000km cost you drive each year costs you NEGATIVE

Secondly, they're structured to make it hard for you to get out of them by making it more expensive to give your car back at the end of a four year lease than it is to upgrade to a new car.  Yes, believe it or not that's true.  They do this by structuring a residual payment for the car - say $15,000 that you have to pay to buy out your 4yo car - whereas if you trade it in on a new car you dont need to pay the residual.  The kicker is that usually the residual is less than the sale value of the car at that age.  So what do you think most people chose?  Pay $15k to get a 4yo car, or pay nothing to get a new car.

These things are genuine masterpieces of political engineering.  Whomever designed them had more front than Myers, and what's more whoever agreed to them must have been truly thick.

The nett effect is that we all pay for this through our taxes

That condition no longer applies.

Since Budget night 2011, the same FBT rate (20%) applies no matter what km's are travelled.

Secondly, it is easy to pay out the residual of a leased car in comparison to buying a used one outright. Simply take out 12 month leases and roll them over. For a 4-year old car, the residual after a 4 year lease is 35%, or $10500 for a $30000 car. But if rolled over for 4 years, the residual is 65% x 65% x 65% x 65%, or just $5355. Bargain!!!

In any case, novated leasing stimulates the economy and ensures families are driven around in safe, efficient vehicles rather than 'Broadmeadows Bentleys.'

That condition no longer applies.

Since Budget night 2011, the same FBT rate (20%) applies no matter what km's are travelled.

Secondly, it is easy to pay out the residual of a leased car in comparison to buying a used one outright. Simply take out 12 month leases and roll them over. For a 4-year old car, the residual after a 4 year lease is 35%, or $10500 for a $30000 car. But if rolled over for 4 years, the residual is 65% x 65% x 65% x 65%, or just $5355. Bargain!!!

In any case, novated leasing stimulates the economy and ensures families are driven around in safe, efficient vehicles rather than 'Broadmeadows Bentleys.'

Correct, the FBT does not decrease with distance and I am not certain that a novated lease is a problem either.

It might also come as a surprise to some to learn that the GST paid on the car, fuel, rego, insurance, car washing, tyres and driver's licence fees by some significant distance exceeds the GST paid on PT tickets.

Meanwhile GST on public transport, but then again GST is a regressive tax so why is that any surprise, nor the fact that it isn't tax deductable.

Why should it be deductable?

And you seem to be unable to comprehend my point.

Most car drivers will choose a freeway by default, even if the adjacent arterial road provides a better run.

No, your point was not well made.

Why is that limited to car drivers anyway? Same applies to trucks.

Why should it be deductable?

If you use public transport to get to work then it should be treated like other work related expenses. The logic behind 'tax-effective' MV is that there is a business use assumption however marginal that may be.  Again it's an intentional tax anomaly that particularly benefits higher income earners.

If you use public transport to get to work then it should be treated like other work related expenses. The logic behind 'tax-effective' MV is that there is a business use assumption however marginal that may be.  Again it's an intentional tax anomaly that particularly benefits higher income earners.

Why should it?

Public transport users already receives massive subsidies at any rate.

People who have company cars do receive a benefit from their car as do people on some leases - but this is certainly not every car driver and "the others' certainly do not receive a tax concession in their travels to work.

Craig w

If you use public transport to get to work then it should be treated like other work related expenses. The logic behind 'tax-effective' MV is that there is a business use assumption however marginal that may be.  Again it's an intentional tax anomaly that particularly benefits higher income earners.

Getting to an from work IS NOT a work related expense. The only deductables for travelling related to work is when you travel from one workplace to another workplace. Home - workplace and workplace - home are not (and should never be) deductable, PT, car or walking. Do you regard your lunch at work as a work related expense? What about non specific clothing for use at work? Rightly, none of them deductable.

Getting to an from work IS NOT a work related expense...

Who said it was...

But explain why it worked out that I would have paid less tax by driving to work using a novated lease vehicle compared to train travel. Small business owner drivers from home to his shop and claims it as business expense. Of course travelling to and from work is not a work expense

Who said it was...

Um, just let me think about that for a nano second... YOU DID!

If you use public transport to get to work then it should be treated like other work related expenses.

Small business owner drivers from home to his shop and claims it as business expense. Of course travelling to and from work is not a work expense

A business expense in terms of the business paying for it, but it's still not a legitmate tax deduction, not for the individual, not for the small business and not for a corporation.

Um, just let me think about that for a nano second... YOU DID!

My dear Aaron at that esteem institution...

The significant word you missed in that single sentence was SHOULD . I'm well aware that travel too and from your primary work place is not tax deductable.

That doesn't change the fact people can obtain a tax benefit in the process of doing just that